Cement Industry
ANALYSIS OF CEMENT INDUSTRIES
FINANCIAL REPORTING & ANALYSIS
Submitted to
Dr. Madhumita Chakraborty
Submitted by
Section C - Group 5
Prakash Prabu M (PGP28120)
Mohammed SaadSalmaan (PGP28121)
Aditi Agarwal (PGP28122)
Preksha Agarwal (PGP28134)
Sireesha Yakkali (PGP28135)
Aditi Bhura (PGP28148)
Nikhar Bhatia (PGP28167)
Table of Contents
1. Industry Analysis 4 2. Cost Structure 7 3. Accounting Policy 8 3.1 Fixed Assets & Depreciation Policy 8 ACC Cements 8 India Cements 9 UltraTech Cement 10 3.2 Inventory Valuation Policy 10 ACC Cement 10 UltraTech Cement 11 India Cement 11 3.3 Revenue Recognition 11 ACC Cement 11 India Cement 11 UltraTech Cement 12 4. Profitability Ratios 12 4.1 Net Profit Margin 12 4.2 Operating Profit Margin 13 5. Return Ratios 14 5.1 Return on Equity 14 5.2 Return on Capital Employed 16 6. Efficiency Ratio 17 6.1 Asset Turnover Ratio 17 6.2 Inventory Turnover Ratio 18 6.3 Debtors Turnover Ratio 19 6.4 Creditors Turnover Ratio 20 7. Liquidity Ratios 21 7.1 Current Ratio 21 7.2 Quick Ratio 22 8. Solvency Ratio 24 8.1 Debt to Equity Ratio 24 8.2 Interest Coverage Ratio 25 9. Cash Conversion Cycle 26 10. DuPont Analysis 27 11. Cash Flow Statement Analysis 28
1. Industry Analysis
The Indian cement industry is the 2nd largest market after China. It had a total capacity of about 300 m tons (MT) as of financial year ended 2010-11. Consolidation has taken place with the top three players alone controlling almost 35% of the capacity. However, the balance capacity still remains quite fragmented.
Despite the fact that the Indian cement industry has grown at a commendable rate in the last decade, registering a growth of nearly 9% to 10%, the per capita consumption still remains substantially poor when compared with the world average. While China registered the highest per capita cement consumption in 2010 of about 1,380 kg, India
FINANCIAL REPORTING & ANALYSIS
Submitted to
Dr. Madhumita Chakraborty
Submitted by
Section C - Group 5
Prakash Prabu M (PGP28120)
Mohammed SaadSalmaan (PGP28121)
Aditi Agarwal (PGP28122)
Preksha Agarwal (PGP28134)
Sireesha Yakkali (PGP28135)
Aditi Bhura (PGP28148)
Nikhar Bhatia (PGP28167)
Table of Contents
1. Industry Analysis 4 2. Cost Structure 7 3. Accounting Policy 8 3.1 Fixed Assets & Depreciation Policy 8 ACC Cements 8 India Cements 9 UltraTech Cement 10 3.2 Inventory Valuation Policy 10 ACC Cement 10 UltraTech Cement 11 India Cement 11 3.3 Revenue Recognition 11 ACC Cement 11 India Cement 11 UltraTech Cement 12 4. Profitability Ratios 12 4.1 Net Profit Margin 12 4.2 Operating Profit Margin 13 5. Return Ratios 14 5.1 Return on Equity 14 5.2 Return on Capital Employed 16 6. Efficiency Ratio 17 6.1 Asset Turnover Ratio 17 6.2 Inventory Turnover Ratio 18 6.3 Debtors Turnover Ratio 19 6.4 Creditors Turnover Ratio 20 7. Liquidity Ratios 21 7.1 Current Ratio 21 7.2 Quick Ratio 22 8. Solvency Ratio 24 8.1 Debt to Equity Ratio 24 8.2 Interest Coverage Ratio 25 9. Cash Conversion Cycle 26 10. DuPont Analysis 27 11. Cash Flow Statement Analysis 28
1. Industry Analysis
The Indian cement industry is the 2nd largest market after China. It had a total capacity of about 300 m tons (MT) as of financial year ended 2010-11. Consolidation has taken place with the top three players alone controlling almost 35% of the capacity. However, the balance capacity still remains quite fragmented.
Despite the fact that the Indian cement industry has grown at a commendable rate in the last decade, registering a growth of nearly 9% to 10%, the per capita consumption still remains substantially poor when compared with the world average. While China registered the highest per capita cement consumption in 2010 of about 1,380 kg, India